The World Bank approved US$ 410 million credit to Bangladesh to improve municipal governance and basic urban services in district towns and municipalities. The Municipal Governance and Service Project will benefit 3.4 million people in around 100 urban communities across the country. It will provide financial support to 26 urban government bodies with high economic growth and job creation potential, located along growth corridors leading from Dhaka towards Chittagong , Rangpur , Sylhet, Mymensingh. It will also cover three district towns in the south, said a press release. The credits from the International Development Association (IDA), the World Bank’s arm for the world’s poorest countries, have 40 years to maturity with a 10-year grace period and carry a service charge of 0.75 percent. ”Bangladesh experienced some of the most rapid urbanization in South Asia . Yet, the cities offer inadequate infrastructure and low levels of urban services, particularly in district towns and municipalities,“ said Johannes Zutt , World Bank Country Director for Bangladesh . ”In response to urban governance challenges, this project aims to make the urban local bodies become strong, responsive and inclusive local government institutions able to provide better urban services and undertake immediate response operations in times of major emergencies,“ he added. The release said that the country’s urban population rose from 15 percent in 1980 to 28 percent in 2010. Municipalities and towns play key roles in supporting economic growth, jobs creation and poverty reduction and are growing rapidly. However, they face severe challenges such as weak municipal finances and governance systems, insufficient administrative capacity, and inadequate basic urban services that constrain them from developing into competitive, innovative and livable places. Through a demand-driven approach, the project aims to build roads, water and sanitation systems, markets, bus terminals, and municipal services centers in these communities. It will build a culture of responsible operations and routine maintenance of infrastructure assets. The World Bank Board also endorsed the Bangladesh Country Assistance Strategy (CAS) Progress Report for the period for the fiscal years 2011-2015. The institution’s new commitments to Bangladesh in IDA financing during the CAS period FY2011-2015, including the just approved Municipal Governance Support Project , stands at 4.5 billion.
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